Chinese companies face new challenges with foreign mergers

CCTV News

A number of Chinese companies have merged with overseas operations in recent years, particularly in fields such as environmental protection and real estate. But some recent proposed mergers in Australia and Germany were rejected out of “national security” concerns.

CCTV’s Liu Yang visited one company in Sichuan province to find out more about the challenges and opportunities facing Chinese companies.

Chinese companies face new challenges with foreign mergers

Chinese companies face new challenges with foreign mergers

A number of Chinese companies have merged with overseas operations in recent years, particularly in fields such as environmental protection and real estate. But some recent proposed mergers in Australia and Germany were rejected out of "national security" concerns. CCTV’s Liu Yang reports.

As a leading Chinese environmental company, Techcent focuses on services and engineering in the field of environmental technologies. Since 2014, the company has made four major overseas mergers and acquisitions in Germany and the United States.

Reputation and technology are the big gains.

Recently, the company acquired 100 percent of Bilfinger Water Technologies. The firm was one of the world’s leading providers of water treatment technology. M&A has helped this Chinese company fast forward its development.

According to Xinhua News Agency, China’s overseas mergers and acquisitions were worth a record $134 billion in the first half of 2016. However, China’s purchasing power has raised concerns in the West, especially in countries such as Australia and Germany.

In August this year, the Australian government rejected China’s State Grid Corp’s bidding for its largest electricity network, citing “national security” concerns. Another example is recent delays surrounding a China-financed nuclear power station in the UK.

Over the years privately-owned Chinese firms account for two thirds of the 20 largest overseas M&As and there are certainly mutual benefits for both sides.

Liu Chunsheng discusses China’s international partnership

To discuss in details challenges faced by Chinese companies to expand internationally, CCTV America’s Mike Walter spoke with Liu Chunsheng, associate professor at Central University of Finance and Economics.